\u3000\u3 Shengda Resources Co.Ltd(000603) 589 Anhui Kouzi Distillery Co.Ltd(603589) )
Event:
The company released the 2021 annual report and the first quarter report of 2022. In 2021, the operating revenue reached 5.029 billion yuan, a year-on-year increase of 25.37%; The net profit attributable to the parent company was 1.727 billion yuan, a year-on-year increase of 35.38%; Deduction of non net profit was 1.484 billion yuan, a year-on-year increase of 19.45%; EPS2. 88 yuan / share; It is proposed to pay 15 yuan (including tax) for every 10 shares. In the first quarter of 2022, the operating revenue was 1.312 billion yuan, a year-on-year increase of 11.80%; The net profit attributable to the parent company was 485 million yuan, a year-on-year increase of 15.53%; Deduct non net profit of 473 million yuan, with a year-on-year increase of 17.46%.
Key investment points:
2021q4 insisted on controlling goods and supporting prices, reducing the rate of revenue month on month, and deducting the net profit not attributable to the parent company, which was under pressure due to the increase of promotion expenses + the increase of income tax rate. The total revenue / profit of the company in 2021 successfully achieved the target set at the beginning of the year. In 2021q4, the revenue was 1.4 billion yuan (the same as + 5.72%), the net profit attributable to the parent was 577 million yuan (the same as + 39.95%), and the net profit deducted from non attributable to the parent decreased by 5.48% year-on-year. In the fourth quarter, the revenue growth rate decreased month on month, which is expected to be controlled by supporting the price of products at the end of the year; The non recurring profit and loss during the period was mainly affected by the relocation of the fourth branch plant and the government land compensation obtained by the company included in the non recurring income. The decline in net profit after deduction of non parent company is mainly due to the increase of promotion expenses (bottle opening and code scanning promotion, terminal brand cultivation, etc.) + the increase of income tax rate (the overall tax accounting at the end of the year is paid in advance). The company’s annual sales expense was + 93 million year-on-year, and the sales / management expense ratio was -0.90pct / – 0.76pct year-on-year.
The epidemic slowed down the pace of delivery and affected the revenue performance of 2022q1. The company’s Spring Festival sales in 2022 were booming. Before the festival, the terminal sales price of some products increased, which had a slight impact on mobile sales. After the festival, the company maintained a normal payment collection rhythm and the price was stable. In the first quarter, the company’s Baijiu business revenue increased by 11.58% year-on-year, and the revenue growth rate was slightly lower than expected. The core reason was that since March, the epidemic broke out in Hefei, Lu’an, Huainan, Huangshan, Wuhu and other places in Anhui Province, which had an impact on consumption scenes such as catering and banquets; The company’s channel operation mode has always been dominated by price stabilization and price support, and rarely pressed goods to the channel. The outbreak of the epidemic led to poor collection and delivery in mid and late March, affecting the performance of the revenue side, but the company’s inventory remained at the level of about one month. In 2022q1, the sales revenue was 1.136 billion yuan, a year-on-year increase of 3.0%, and the operating net cash flow was 156 million yuan (year-on-year turnaround); The accounts received in advance at the end of the period were about 392 million, q4-329 million month on month. In addition, the gross profit margin of the company in 2022q1 is 78.0% (the same as + 1.5pct), which is expected to be mainly driven by the increase of product sales for 10 years or more during the Spring Festival; The sales expense rate is 14.9% (the same as + 2.8cpt), which is mainly due to the continued promotion expenses such as bottle opening and code scanning; In addition, the company’s tax and surcharge ratio / administrative expense ratio were -1.17pct / + 0.16pct year-on-year respectively. Under the comprehensive impact, the net interest rate of 2022q1 was 37.0%, an increase of 1.2pct year-on-year.
The marketing reform has been deeply promoted, the product structure has been continuously improved, and the follow-up performance is waiting for release. The company has solid fundamentals and flexible private system. In recent years, the management level has changed. Two highlights of the company in the future: first, after the breakthrough of production capacity bottleneck, firmly promote marketing reform, and strengthen the leading power of manufacturers through a series of operations such as big business sinking, product cutting, force group purchase and cost recovery, so as to make the objectives of manufacturers tend to be the same; At the same time, actively promote the assessment of dealers and internal teams, and Hefei marketing center will soon be put into operation. Second, the product structure continues to improve. The company’s secondary high-end product revenue of more than 200 yuan accounts for a relatively high proportion, and the product structure is excellent. In the future, it will continue to focus its resources on products with more than 10 years of cellar in kouzi, increase marketing investment, and the newly launched strategic large single product and fragrance 518 will also be upgraded upward to release performance flexibility. At present, the market’s view of the company is relatively pessimistic. We need to see the performance cashing or positive feedback from the channel before we can transfer the expectation.
Profit forecast and investment rating: continue to be optimistic about the long-term growth of the company under brand concentration and price upgrading; In the future, the reform dividend will continue to be released, and the long-term upward trend is clear. In addition, the repurchase of the company has been successfully completed, and the implementation of incentives in the future will also bring positive catalysis. It is estimated that the EPS from 2022 to 2024 will be 3.42/4.14/4.99 yuan, corresponding to pe15 / 13 / 11 times, with a “buy” rating.
Risk tips: 1) the epidemic situation repeatedly suppresses the demand of the industry; 2) Macroeconomic fluctuations hinder the process of consumption upgrading; 3) Intensified market competition in the province; 4) The increase of expense investment will affect the profitability; 5) The expansion outside the province was less than expected.
